The sister coin of the controversial TerraUSD is basically worthless now. There is Luna crypto collapse. Luna plunged to $0 (Luna crypto to USD) on Friday shaking the whole crypto market as per the data from CoinGecko, highlighting a stunning collapse for a digital currency that was once worth $100. So if you are wondering Luna crypto what happened, then keep on reading the article. Here is some Luna crypto news.
The whole crypto space is not pretty good presently. Anywhere you see, you will only see red. Both major cryptos: Bitcoin and Ethereum have decreased by 30% week over week, creating lows that were not seen since 2020. Apart from that, Altcoins such as Cardano, Solana, and Dogecoin are performing even worse.
This is very bad news for the crypto investors but nothing unaware of. Cryptos are notoriously fluctuating assets that just reacted to tempestuous economic conditions.
Luna Crypto Collapse: What Actually Happened?
But among all these, what is much more uncommon and important is the Luna crypto collapse and its related TerraUSD (UST) stablecoin. This has vaporized billions of crypto wealth sending shockwaves across the whole crypto space. No Luna crypto price prediction worked today.
There are two interconnected stories here. The UST stablecoin and the Luna cryptocurrency, both are a part of the Terra blockchain. The UST coin is formulated to retain a value of $1 at all times which depegged on last Saturday and since then it fell to 30 cents. While UST faced so much downfall, the Luna crypto collapsed in among the most spectacular crypto crashes that were ever recorded.
The value of the coin decreased from $116 in the last month to just a penny on Thursday. Its market cap presently stands at $641 million, which has decreased from its peak of more than $40 billion. According to Mike Boroughs, cofounder of crypto investments firm Fortis Digital,
“This is historic for the crypto markets. This is a defining moment for the space due to its size and impact in terms of the number of people that lost substantial value.”
UST & Luna Crypto Collapse: Are They Next Worthless?
This disaster impacts the Terra ecosystem that was still trending a few weeks ago. Its native crypto that including stablecoin TerraUSt or UST, and the Luna crypto have almost lost all their value. UST, which is backed up by the US Dollar, at the last check was down to just $0.102542 which is a bit more in comparison to a dime. It has decreased by 84% in the last 24 hours as per the coinGecko. The stablecoin, which has already lost its stability, is down 91.4% from its all time high of $1.09 hit on January 11.
In the case of the Luna token, its value dropped to $0.0001826 (at the time of writing this). The crypto has already lost 99.9% of its value in the last 24 hours. It once traded to as high as $119.18 on April 5, as per reports. These two UST and Luna crypto collapse took place on May 13 when the famous cryptocurrency exchanges OKX and Binance planned to delist them for protecting their users. Binance Founder Changpeng “CZ” Zhao said in a tweet,
“At #Binance we prioritize user protection. We made the decision to suspend LUNA and UST trading.”
“An exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol. Their validators have suspended their entire network, resulting in no deposits or withdrawals possible to or from any exchange.”
“Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading.”
Luna Crypto Collapse: Why Did Luna Crash?
Several investors have liquidated digital currency in line with the weakness in the equity industry as they are worried about a worsening economic situation. Since crypto is now thought a risky asset just as ascending tech stocks are, they are among the first to suffer from the sentiments of the negative investor.
The selloff is also connected to the return of tension of crypto rug pull and crypto scams after the disaster of the algorithmic stablecoin UST and the Luna token, which both come from the Terra ecosystem. UST or TerraUSD lost the $1 peg this week. After a primary drop to $0.65, the crypto was dragged to $0.22. The Luna token has decreased by over 99 percent in value.
The functioning principle of UST, which shares a technology with Luna, is this: When the value decreases, the owners of UST can resell their assets to Luna Foundation Guard in return for $1. This way, the stablecoin reserve reduces, thus raising its value until it comes to a normal level. But the mechanism does not take into account scenarios where users redeem large amounts of their UST at once in a small period.
Encountered with fears that are linked to growth, various investors in the last weekend concurrently parted with their UST assets. In response to that, the LFG, which offers a reserve of Bitcoins, sold everything for reinjecting capital into the UST.
Making the matter even worse, the BTC foundation bought was valued at $42,000 at that time and now has lost a massive part of its value. Since that time, there has been chaos all over.
The so-called stablecoin and its sister crypto are sending shockwaves across the crypto market, evacuating billions of their value and creating liquid cryptos like Bitcoin to crash. UST and Luna crypto collapse, taking Luna to as low as $0 and UST to 30 cents. This volatile market is now showing some real games to its investors.
Frequently Asked Questions On Luna Crypto Collapse
There has been the Luna crypto collapse where these 3 top crypto collapses to as low as $0 on Friday.
The Terra crash arrives amid a downturn for the wider crypto market, which has witnessed BTC fall over 50% since its all-time high of near to $69,000 in November, however, the Luna crypto crash has been blended by problems with dollar-pegged stablecoin UST of Terra.
Yes, on Friday Crypto.com declared that it has suspended trading of Anchor, LUNA, and Mirror. So if you are wondering Luna crypto how to buy, we would recommend you to wait for a few days.